October 18th, 2017 6:08 AM by Jackie A. Graves, President
a real estate boom, buyers will clamor for almost any house
that hits the market. This is great while it lasts, but unfortunately when the
party's over, the homebuyers who chose the best locations will be left holding
property that depreciates at a much slower rate. This discrepancy is largely a
result of a home's location.
location" is a common mantra in real estate. And it's good advice – except
for one thing: most people have no idea what this really means.
A "good location" can
mean different things to different people, but there are also subjective
factors that determine a home's value. Depending on your personal needs and
preferences, you may not be able to buy a home with all of these factors. And
that's OK – after all, a home is much more than just an investment. However,
next time you're shopping for a new property, keep the following factors in
What part of a city you choose to
live in will undoubtedly affect how much you pay for your home. Land is a
finite commodity, so cities that are highly developed and are bound from large
amounts of additional growth, such as San Francisco, tend to have higher prices
than cities that have too much room to expand. For example, many suburban
communities have become what the media has dubbed "slumburbs"
because such a large number of homes are uninhabited that the areas have fallen
into disrepair. In most cases, this urban sprawl occurs as a result of
population growth, according to the U.S. Bureau of Census Data on Urbanized
Areas. When sprawling cities experience a population exodus, it's the outlying
areas that tend to suffer the most sever declines in property value. (See also: Making Money In Residential Real Estate.)
The neighborhoods that appeal to
you will largely be a matter of personal choice. However, a truly great
neighborhood will have a few key factors: accessibility, appearance and
amenities. Your neighborhood may also dictate the size of the lot on which your
house is built.
In terms of accessibility, you
should look for a neighborhood that is situated near your city's major routes
and that has more than one point of entry. Commuting to and from work is a big
part of many people's day, so a house with easy access will be more desirable
than one that is tucked away and can only be accessed by one route.
The appearance of the
neighborhood is also important. Large trees, landscaping and nearby green or
community spaces tend to be desirable. You can also judge the popularity of the
neighborhood based on how long homes in that area tend to stay on the market;
if turnover is quick, you're not the only one who thinks this is a desirable
place to live.
A great neighborhood should also include important amenities such as grocery
stores, shops and restaurants. Most people like to frequent places that are
convenient – if you need to drive a great distance to get to anything, this is
likely to make your house less attractive. Schools are another important
amenity – even if you don't plan to have kids, if you want to sell your home
this is something many buyers will be on the lookout for. The distance from and
quality of local schools both play into this. (See also: 8 Signs Your Neighborhood Is
On The Upswing.)
It's not just present amenities
that matter, but future ones as well. Plans for schools, hospitals, public
transportation or other public infrastructure can dramatically improve property
values in the area. Commercial development can also improve property value.
When you're shopping for a home, try to find out whether any new public, commercial
or residential developments are planned and consider how these additions might
affect the desirability of the surrounding areas.
The next thing you need to
consider is where the house is actually located. In this instance, there are a
few things you should watch out for.
For example, if your home is on a
busy road, you will probably get it for a lower price, but it will also be more
difficult to sell down the road. The same may hold true for houses that stand
next to or back onto commercial property, such as a grocery store or gas
station, or houses on streets that get an unusual amount of parking traffic and
parked cars, such as those near large churches or community centers. This is
why a large number of such homes are rentals.
Suppose that you have narrowed
your choices to two homes that stand side by side in a great neighborhood. One
needs repairs and updates, but has a huge lot. The other is in tip-top shape
but sits on a lot half the size. The prices of the two homes are similar. Which
do you choose? This is one aspect of house hunting that surprises many people.
In most cases, the beat up house is the better investment.
Why? Your house is a depreciating asset. The lot, on the other
hand, will maintain its value (or likely appreciate) relative to the house. If
you bulldozed both houses, the larger lot would sell for more. So, if you can,
choose a bigger, better shaped or better situated lot over a nicer house. A
less attractive house can always be updated, added on to or replaced altogether
while the lot can't be changed. (See also: Top 4 Things That Determine
Your Home's Value.)
Location isn't entirely
subjective – in fact, it's based on a fairly static set of criteria. So, when
you set out to shop for a new home, make sure the neighborhood isn't just
desirable to you.
Tara Struyk – To view the original article click here